Critical Importance of Automating Invoice Processing In The Post-Covid World
The COVID-19 pandemic has completely changed the way the world does business. A digital process management capability has become mandatory for survival, and businesses which do not have this capability will struggle to compete effectively.
Most organizations have been forced to implement remote working (Work from Home) in a hurry in the current pandemic scenario, to ensure business continuity while also addressing employee safety. This sudden change of operating model without enough time for the employees and their managers to adapt is leading to challenges in key financial processes like accounts payables, leading to additional risks.
Many businesses that have not yet transformed their existing manual processes are likely to face challenges especially in the accounts
management process in the post-pandemic world.
With relatively lesser staff (or no staff) in office:
- Invoices sent to offices are not being processed in time.
- This has a direct impact on supplier relationships as this often leads to delays and errors in clearance of supplier payments.
- Cashflow is affected
- There is also an increased risk of fraud.
Though the need to process invoices digitally has always been there, it has accelerated in the post-COVID world. That said, most traditional accounting softwares and even ERP systems are not equipped for this transformation and still have a significant dependence on manual processes. This leads to significant challenges in accounting processes. This is especially true for the accounts payables process where we see challenges like the following which can lead to significant funds leakage and audit challenges:
- Missing documents
- Delayed payments
- Incorrect numerical entries
- Mismatched numbers on purchase orders, delivery challans and invoices
With these challenges, organizations today need to rethink their Accounts Payable function to stay operational in the short run and sustain growth in the long run.
Automating the accounts payables process helps in eliminating most of these challenges and delivers the following benefits:
- Seamless and accurate data capture: In an automated accounts payable system, once the invoice is received from the supplier by e-mail, it is scanned and invoice data is captured using OCR. This invoice data is automatically entered into the respective fields, and the data is validated and checked for accuracy. The automated accounts payable system checks the recent invoice against duplicate invoices, and verifies this against the defined rules. Once the appropriate checks are made, the invoice is automatically posted in the ERP for approval.
- Faster processing: Automating the accounts payable process helps in providing the foundation for enabling faster processing of invoices. As invoice data is automatically captured, it reduces the probability of errors and reduces processing time significantly. If invoices are not cleared within a certain time limit, they can be automatically forwarded or routed to a higher authority.
- Improved visibility: By analyzing the time and the key issues impacting the accounts payable process, organizations can unlock key insights by analyzing important factors such as procurement data, large deals or payments and cash flow analysis. For example, a large payment made to a supplier can qualify for a discount, which can significantly impact the cash flow and the profits over a period of time. Using analytics, this data can be used to negotiate larger discounts with key suppliers.
- Handling exceptions: One of the most common problems for accounts payable professionals is to handle invoices that are received before the actual delivery of goods. This problem has escalated during the pandemic, due to logistical issues. This issue can be resolved if the automated accounts payable solution has the capability to handle exceptions. It can keep the invoice on hold automatically, till the actual goods are received. This validation stops the invoice from being entered into the system, and avoiding the need for correcting invalid entries. An automated accounts payable system can do automatic matching of invoices against the goods received, and prevent any possible issues. This is a key and must-have capability in the current situation where a majority of people are working from home.
In summary, organizations can look at the current pandemic situation as a huge opportunity to correct the inefficiencies in their accounts payable process by leveraging the benefits of automation.
If you want to avail the services of a trusted and experienced partner for automating your Accounts payable process, please feel free to write in to us at firstname.lastname@example.org